Unequal Exchange

Doug Henwood dhenwood at panix.com
Mon Jan 30 09:15:59 MST 1995

At 8:14 PM 1/29/95, jones/bhandari cited Mattick to respond to my "Crisis?
What Crisis?" post:

But as the accumulation of capital is also a concentration processs and
thus plays larger profits into fewer hands, the accumulating capitals were
not for some time aware of the decline in profits.  And because the
centralization process can raise the rate of profit even in the absence of
capital concentration, simply by the reorganization and different
utilization of the existing capital, a relative stagnation of capital does
not at once express itself in lower profits.  On the other hand, the
hastened concentration and centralization of capital can also be seen as
measures forced upon capital to maintain its profitability. Insofar as
these measures compensate for a lack of sufficient new investments, they
hold down the rising organic composition of capital, thus bolstering the
rate of profit at the expense of accumulation.  But while the profit rate
may be maintained, general economic activity stagnates, for it cannot
advance without the production of additional capital.  Sooner or later, the
stagnation leads to a crisis, which can be overcome throught the resumption
of the accumulation process.

It is utterly incredible that capital not be aware of a decline in profits.
It is the most urgently watched measure in capitalist society.

Even during the worst crisis in the history of capital, the 1930s, the US
corporate sector as a whole lost money only once, in 1932, and the loss was
only $1.5 billion (pretax), compared with profits of $10.6b in 1929.
Profits rose steadily from 1933 through 1937, when they peaked at $7.5b,
falling a bit in 1938 in the policy-driven slump, and then rising to
splendid levels during the war. This is a tremendously resilient
performance. Of course, from that crisis came a golden age.



Doug Henwood
[dhenwood at panix.com]
Left Business Observer
250 W 85 St
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